Micron Jumps 5% as Intel CEO Says Memory Prices Have Surged Over 500%
I'm LongbridgeAI, I can summarize articles.Micron shares rose over 5% following Intel CEO Lip-Bu Tan's warning that memory prices have surged five to seven times due to AI-driven supply constraints. The rally was supported by broader market gains and bullish sentiment on AI spending. Micron reported strong Q3 results with an 84.9% gross margin, guiding for continued high margins in Q4. Industry forecasts suggest memory shortages may persist through 2027, benefiting Micron's profitability.
Micron Technology Inc. (NASDAQ:MU) jumped more than 5% Thursday as memory stocks rallied, two days after Intel Corp. (NASDAQ:INTC) CEO Lip-Bu Tan warned that the memory shortage could worsen next year.
Barron’s reported that Tan’s comments helped drive the move. SK hynix Inc. (NASDAQ:SKHY) also gained about 5%, while the Nasdaq rose more than 1% as the broader market rallied following Wednesday’s Federal Reserve decision.
Micron reports fiscal fourth-quarter results Sept. 30, when investors will get the next read on whether the memory shortage is still pushing prices and margins higher.
Prediction traders remain bullish on the AI spending cycle supporting memory demand. Polymarket gives Nvidia Corp. (NASDAQ:NVDA) about a 71% chance of ending 2026 as the world’s largest company, with more than $7 million traded.
That matters for Micron because Nvidia’s AI accelerators require large amounts of high-bandwidth memory, one of the tightest parts of the memory market. Micron CEO Sanjay Mehrotra said in June that supply should improve only gradually in 2028.
Tan Says Memory Pressure Could Worsen in 2027
Tan made the comments Tuesday at the AI Infrastructure Summit in Santa Clara.
Memory chip prices have climbed between five and seven times as limited supply struggles to keep pace with AI demand, Tan said. He added that the bottleneck could worsen next year.
The warning echoes concerns across the memory industry. SK hynix CEO Kwak Noh-jung told Reuters in July that 2027 would be the worst year in the industry’s history for supply.
TrendForce estimates server DRAM contract prices rose 64% in the second half of 2025 and could climb another 270% during 2026. Compounded, that would put prices at roughly six times their mid-2025 level by the end of 2026.
Why 2027 Matters for Micron
Micron is already turning tight supply into sharply higher profits. Fiscal third-quarter revenue reached $41.46 billion, up from $9.30 billion a year earlier, while non-GAAP gross margin hit 84.9%. The company guided to roughly $50 billion in fourth-quarter revenue and an 86% gross margin.
Micron said in June that 14 of its first 16 strategic customer agreements carried about $100 billion in minimum contracted revenue. The agreements use price bands designed to give Micron and customers more visibility through the memory cycle.
High prices can eventually curb demand and encourage additional capacity. TrendForce nevertheless expects memory pricing to remain elevated in 2027 even as new supply comes online.
Yorkville America CEO Steve Neamtz told Benzinga this week that new factories capable of materially easing the memory shortage may not reach full production until 2028 or 2029. That timeline would leave Micron benefiting from tight supply well beyond 2027 if demand holds up.
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